Now that the online music marketplace is firmly established, new players are …

Through the magic of audio compression, reducing CD audio to compact, highly-portable audio files is so easy that the hardest thing about it is deciding which quality settings to use. That decision isn't hard to make when it's made for you, however. Of those selling music online, only AllofMP3.com allows users to choose their own encoding settings and formats for music from the major labels, all without DRM. The rest primarily sell music encoded at 128-192Kbps, on average, and use their pet formats (typically) laced with DRM. (For some great exceptions to this rule, hit the discussion.)

For many music fans, including some of us up in the Orbiting HQ, this is a less-than-ideal situation. The compression techniques used by the industry are lossy, that is, they approximate the original recording, but data is "lost" in the compression. The difference in audio fidelity between the CD version of a song and its online music store equivalent—which according to personal testimonials range from the "undetectable" to the "blindingly obvious"—is a matter of scientific fact, even if its significance for the marketplace (and your ears) isn't.

For the most part, the online music scene is doing well, with industry-leader Apple taking the lion's share of last year's triple growth. While Napster did increase its encoding quality to 192Kbps, it is safe to say that there is no "quality war" between music sales venues at this time. According to a profile at Cnet, that may change, as new music stores look to take on the competition by offering higher-quality offerings, including lossless music (that is, music encoded with no loss in quality). With so few consumers complaining about the quality available today, will they take off?

The growth of both online music and portable player sales certainly suggests that while some audiophiles seek higher-fidelity though expensive audio components, there's no shortage of people who prefer the convenience, speed, and/or price of the current offerings. Be that as it may, there's another reason why higher-quality audio faces a barrier to widespread adoption: DRM. MusicGiants, which offers lossless audio in the Windows Media format, can only expect to make customers of people who are already utilizing Windows Media-based devices, since its files won't work within iTunes on or the iPod. It's the same issue we've seen before: today's DRM implementations do not allow for interoperability. At any given time, the "playing field" is made more complex by the fact that the marketplace is partially defined by the aftermath of the DMCA and its anti-consumer provisions. The device lock-in which is made possible by DRM creates mini-marketplaces where consumers have to weigh their previous investments in music against future purchases, but for no other reason than DRM limitations.

The US Senate Committee on Commerce, Science and Transportation should consider the effects this has on competition and innovation, but as we have seen before, the prevailing attitude among major entertainment industry representatives is that DRM isn't a problem because their products are so inexpensive.

"[In] today’s market... inexpensive legitimate digital copies of most types of works are readily available, and increasingly can be obtained through online download services.... The inconvenience that faces consumers of works tethered to specific devices is far outweighed by the threat to the enjoyment of copyright posed by illegal digital distribution facing copyright owners."

Arguing against both DRM interoperability and fair use circumvention, the RIAA and others use the tactic of the piracy scarecrow to keep easily frightened politicians away from considering the matter in-depth. By labeling device-lock in and song lock-down as "inconveniences," the major content producers hope to redefine innovation as monetizing the very inconveniences they have created.

Ken Fisher / Ken is the founder & Editor-in-Chief of Ars Technica. A veteran of the IT industry and a scholar of antiquity, Ken studies the emergence of intellectual property regimes and their effects on culture and innovation.